As e-commerce grows – at least in part due to COVID-19 – online retailers are using AI to pave their way to efficiency, personalization, and ultimately success.

AI, eCommerce, Post-COVID

If consumers were hesitant about using e-commerce, they’re not now. Mandated stay-in-place orders and social distancing have made shopping from home the preferred alternative – if not the only available option. Even prior to the Coronavirus outbreak, e-commerce was gaining popularity. Salesforce’s new Global Shopping Index shows that, as of Q2 2020:

  • The number of digital shoppers has increased by 40%.
  • Digital sales drove 20% of revenue growth this quarter; compare that to 12% in Q1 2019.
  • Between Q1 2019 and Q2 2020, digital traffic growth rose 16%.
  • During the same period, average spend per visit grew 4%.

COVID has changed, at least temporarily, how we shop and also how we interact with others. While some of these changes will evaporate once the virus is no longer a threat, others will likely continue. A recent Capgemini Research Institute report shows that:

  • Only 24% of consumers expect to return to their pre-Coronavirus level of frequenting physical stores.
  • Just 39% of consumers expect to return to their ‘traditional’ shopping habits in the next 6-9 months.
  • More people described themselves as very engaged with ecommerce after the recent COVID crisis.

To take advantage of this surge in interest, retailers need to do more than simply cobble platforms and channels onto their existing offering. They need to focus on providing a complete experience, and one that emphasizes the human element so often missing from online retail. By showing the customer that they are more than a shopping cart and an account number, brands can unlock the potential of e-commerce to lead in the new normal.
Easier said than done? It will take work, of course, but it’s entirely possible – if you’re willing to use AI to humanize the shopping experience and personalize engagement.


On-Demand Webinar

7 Surprising Predictions about Consumers in the New Normal


7 Ways E-Commerce Can Drive Success with AI

From personalized pricing to delivery optimization, AI can be used in many ways to create greater e-commerce success. Let’s briefly look at seven of them:

  1. Visual product searches

    Few things are more frustrating than knowing what you want – but not knowing its name. Visual search technology is now built into many smartphones; with Google Lens, for example, you can point your phone’s camera at a product and learn all about it. Some popular social platforms (i.e. Snapchat, Instagram, etc.) will connect users with that item’s product page. The purpose behind all this? To make the shopping experience that much easier and improve search results.

  2. Predicting customer behavior

    Advanced processing and analysis techniques and mountains of available data – including unstructured data from social media, loyalty cards, market search, and more – are helping online retailers understand customer behavior better than ever. AI’s predictive capabilities make it easier to build detailed profiles and find emerging trends, which translates into determining a consumer’s probable next move with greater accuracy.

  3. Retargeting lapsed customers

    AI can also help brands identify and connect with lapsed customers. A good example of this is the email or push notifications you get about items left in your online shopping cart. A little nudge can be all that is needed.

    Some online retailers are taking things to the next level by using facial recognition to capture customers’ dwell times on particular products. If the customer looks at something for a certain length of time, that information will be stored and possibly used for their next visit. Other signals of interest can be used to fashion personalized offers and other methods of outreach.

  4. Improved sales forecasting

    Producing accurate sales forecasts is another way AI can help retailers now and in a post-COVID environment. Precise sales forecasting comes with a lot of benefits:

    • Inventory management is easier.
    • There are fewer out-of-stock situations, and their related losses in sales and customer satisfaction are minimized.
    • Potentially expensive overstocks can also be avoided.
    • Retailers become more efficient.

    This, of course, depends on having the right kind and amounts of data, as well as the technology to process it – something that AI excels in.

  5. Route and delivery optimization

    It’s not news that AI can ‘read’ geospatial data and develop more efficient delivery routes. But its ability to manage vast amounts of information simultaneously means AI can do a lot more than that:

    • Automatically schedule and sync delivery requests.
    • Plan deliveries for the customer’s preferred time.
    • Improve resource allocation for the shipping process.
    • Streamline shipping and delivery to minimize waste.
  6. True offer personalization

    Personalization might be the most commonly applied use for AI in e-commerce. We’re all familiar with it: the recommendation engine analyzes past customer behavior and purchasing habits, adds in data from similar customers, and creates recommendations that are more or less unique for each customer. In the near future, expect this principle to be extended to how a customer interacts with a site. The recommendation engine will see whether the customer acted as predicted and use this information to fine-tune its performance.

  7. Price personalization

    Many factors currently influence pricing, but with AI we can essentially create personalized prices for each individual. Once again, we have AI taking in data from the customer’s profile, current trends, the competition’s activity, and more. This can then be used to determine whether to offer the customer a discount will tip them towards making the purchase. It can recommend an amount that will motivate the customer, yet still keep profit margins healthy.


E-Commerce in the Post-COVID Landscape

The future is indeed rosy for online retailers. There’s been a distinct shift in consumer behavior, and it looks like that upward trend will continue in the New Normal. A lot of newcomers are joining the e-Commerce train, and the variety of things available online continues to grow. Companies that use AI to optimize operations, marketing, and the online customer experience can expect to capitalize on this development.


Authored by:  Rajat Narang, Director, Labs at Absolutdata